Global Hydroquinone API Prices Surge in September 2023 Amid Rising Feedstock Phenol Costs

The escalation in Hydroquinone API prices within the North American market can be attributed to elevated raw material costs and unexpectedly robust economic data from China. In an unanticipated turn of events, the expenses linked to API witnessed a significant upsurge on a global scale in September 2023, leaving both pharmaceutical manufacturers and healthcare professionals perplexed. A multitude of factors have played a role in precipitating this sudden increase in Hydroquinone API pricing.

China, widely recognized as a prominent center for pharmaceutical manufacturing, plays a pivotal role in producing the Hydroquinone API. Nevertheless, interruptions in the supply of crucial raw materials and a scarcity of essential manufacturing components in China have caused disruptions in the Hydroquinone API manufacturing process. As a result, manufacturers are grappling with elevated production costs and reduced output, leading to an escalation in the prices of Hydroquinone API.

Moreover, there has been a discernible upward trajectory in the domestic market for a crucial raw material, Phenol, characterized by a steady and consistent price increase. This surge can primarily be attributed to a limited domestic supply, which has favored suppliers and propelled Hydroquinone API prices upwards. Nevertheless, downstream activities have maintained their strength, resulting in heightened quotations from raw material manufacturers. Profits in the downstream Phenol sector have been on the path to recovery, leading to increased procurement by factories in the market. The recent significant escalation in pure benzene levels has resulted in higher cost support and factory expenses, prompting an active adjustment of prices to align with prevailing market rates. However, market participants have exercised caution when pursuing higher prices, primarily responding to the limited trading volume and demand.

Meanwhile, the raw materials sector has displayed resilience throughout September. Despite maintenance plans at domestic facilities such as Wanhua Chemical and Changchun Chemical, downstream configuration units have also been undergoing maintenance with minimal impact on market supply. This intricate raw material landscape has contributed to a constrained Hydroquinone API market in China.

Another significant driver of the increase in Hydroquinone API prices can be attributed to disruptions in the supply chain. Issues pertaining to logistics and the procurement of raw materials have had widespread effects across the industry, exerting an influence on the manufacturing of essential pharmaceutical components such as Hydroquinone API.

Moreover, the considerable rise in worldwide demand, encompassing the United States market, has imposed substantial pressure on the pharmaceutical supply chain. This pressure has extended to Chinese manufacturers as they endeavor to satisfy the escalating demand. Confronted with capacity constraints and supply chain disruptions, Hydroquinone API producers have been operating at full capacity to meet the demand, thereby straining their resources and leading to increased production costs. Simultaneously, an elongated period of dry weather and diminished water levels in the United States has necessitated operational adaptations, with a notable impact on the largest vessels navigating the Asia to US East Coast route, which have had to accommodate available draft conditions.

As per the assessment conducted by ChemAnalyst, it is projected that the global prices of Hydroquinone API will persist in an upward trajectory. This anticipated trend can be attributed to the increasing expenses associated with raw materials, a phenomenon largely driven by the surge in energy prices. Furthermore, the burgeoning demand from downstream industries is expected to exacerbate the prevailing market constraints.